Reno, Nev., one of the cities hit hardest from the housing market collapse, is making a strong comeback in real estate with the expansion of incoming technology companies to the area.
Big name tech giants Tesla, Apple and data security company Switch all announced plans in the last year to locate to Reno. The area, known for its close proximity to recreational Lake Tahoe, is expecting a flood of tech sector workers over of the next couple of years.
Reno’s home prices are already soaring with the prospect of new employers entering the area. The area’s median homes sales price rose by 16% since last year, according to the Reno/Sparks Association of Realtors.
A typical Reno home now sales for $299,250, nearly double the price from the city’s recession low in January 2010 when homes fetched a meager $167,000, according to data from the Northern Nevada Regional multiple listing services.
In Fernley, Nev., a city 30 miles from Reno, where online retailer Amazon has relocated its Nevada hub, home prices have risen 23%.
“The overall growth in the lower market is completely on fire with multiple offers say anything under $500,000 – it’s crazy,” said Monica Gore, a Reno real estate agent at Dickson Realty, who has been selling homes in the area for over seven years.
Around 50,000 people are expected to arrive to the area in the next five years, according to the Nevada Association of Realtors.
With the projected population grown, an additional 9,000 homes per year are needed in Reno, according to Economic Development Authority of Western Nevada (EDAWN)) – a local agency that forecasts region’s economic outlook.
“We have these executives from the tech sector buying homes [in Reno],” said Gore, who specializes in luxury real estate. “You're really going to see the Tesla effect over the next five years.”
Reno real estate agents say it’s not just the entrance of high-paid prospective tech workers who are fueling the local housing market, but many self-employed or entrepreneurial Californians are leaving the Golden State for tax reasons.
“We also have a lot of entrepreneurs, doctors and business owners from California moving to the area who say it’s just to hard to do business there.” Gore said.
The Silver State has no state income tax, compared to neighboring California that levies a 13% state income tax rate on its residences.
The growing tech sector in Reno with its high paid workers is driving home prices upward at the bottom and the top end of the market, said Nela Richardson, an economist at Redfin, a national real estate brokerage.
“[The spike] is across the board in home prices, but particularly in the million dollar plus category,” Richardson said. “Reno is still relatively affordable when compared to other cities for luxury homes.”
Luxury prices in Reno soared 20% year over year, according to special report on luxury sales release by Redfin last month. The Seattle-based brokerage firm says that average luxury home in Reno sales at around $1.1 million – cheaper than nearby San Francisco, where the average price for a luxury estate is $5.9 million.
“We’re also seeing an increase in the number of buyers looking for vacation homes here, “ said Reno Redfin agent Jaime Moore. “Many live in the Bay Area, but are buying a second home in Reno.”
Estate agents say that the size of the “Biggest Little City” is peaking buyers’ interest with its small size for driving across town and its accessibility to recreation activities in the mountains.
“We’re just an hour from Lake Tahoe and three hours from the Bay Area – this is a hidden gem,” said David Hughes, a local estate agent who has been selling homes in the area for 31 years. “We’re getting some big eyes on Reno. We're not just talking about Tesla, it’s other companies as well.”